Oneok to buy Magellan Midstream Partners in deal valued at $18.8B

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Oneok (NYSE:OKE) said Sunday it agreed to acquire Magellan Midstream Partners (NYSE:MMP) in a cash and stock deal valued at ~$18.8B including assumed debt, resulting in a combined company with a $60B total enterprise value.
The consideration will consist of $25/share in cash and 0.667 common share of Oneok (OKE) for each outstanding Magellan (MMP) common unit, representing a current implied value to each Magellan unitholder of $67.50/unit for a 22% premium based on the May 12 closing price.
Oneok (OKE) said it expects the deal to be earnings accretive beginning in 2024, with EPS accretion of 3%-7% per year during 2025-27 and free cash flow per share accretion averaging more than 20% during 2024-27; base synergies are expected to total at least $200M/year.
The combined company will own 25K-plus miles of liquids-oriented pipelines, with significant assets and operational expertise at the Gulf Coast and Mid-Continent market hubs.
Oneok (OKE) expects the combined portfolio will present significant potential for enhanced customer product offerings and increased international export opportunities, which it said could result in total annual transaction synergies exceeding $400M within 2-4 years.
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Capital losses cannot be netted against ordinary income (other than $3,000 a year if you have no gain to apply them against)

"The closing of the transaction is subject to customary closing conditions, including the approvals of both ONEOK shareholders and Magellan unitholders, as well as Hart Scott Rodino Act clearance."


Your basis gets reduced by net losses so that might be it. Remember you may have some suspended losses. There are a few misstatements in your comment. Look at this: eic.energy/...

“the cumulative adjustments seems way to high. Some of the shares I purchased in 2017 have a cost basis close to zero. No way I have got that amount of distributions in just 5 years”
Your basis is also reduced by losses (and increased by income). There’s also the chance that their data is just wrong, so maybe pull your K1s and add up the negative income and distributions?






Who's Khan ?








”i was wondering how many shares of ONEOK we may receive”It’s a fixed exchange ratio. It won’t change based on OKE’s price. Just multiply your MMP units by 0.667 and there you have it.


1. if you own MMP shares, do you get bought out? Should you sell your shares now? do they convert to OneOK? ... a little confusing so appreciate any clarity
2. ive owned from 4/21 in a taxable account - and am currently up in value in my position. i know i will get taxed on those gains - but is the fret in the comments from getting taxed on the dividends (example - dividends in '21, '22, and '23 for myself?)

Assuming you bought $47.00 in April 2021, and you will have received $10.00 in distributions until the deal is complete. With the buyout & cash you'll be taxed on $67.00 assuming the deal goes through as is. (I'm using round numbers for simplicity.) Worst case scenario (no deductions, distributions are 100% return of capital), your cost basis is $37.00 ($47-$10). Your taxable amount per share is $30.00. If your tax rate is 33% state/federal you'll pay $10 per unit in taxes. (Reserve from the $25 per unit cash to pay the tax.)

